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Opinion

The real impacts of increased drilling setbacks

By Amy J. Williams and Terry Fankhauser

Posted:
02/09/2013 12:01:00 AM MST

Over the last year, the future of oil and gas development in Colorado has been hotly debated from two distinct perspectives. One vision espouses "Not in my backyard — or any backyard." However, there are many of us who have another vision. We want to ensure that Coloradans hear an optimistic, pro-environment and pro-energy development perspective as the state's oil and gas commission grapples with a new rule regarding oil and gas well setbacks from buildings.

There is a well-publicized, vocal minority advocating for setbacks of 1,000 feet or more, with the Colorado Oil and Gas Conservation Commission considering a 500-foot setback. On paper, these appear innocuous, but in reality it overlooks the complexity of well siting and the resulting actual impacts. This approach disregards important stakeholders, including the surface owner on whose property the well will be located.

The common perception — that distance from a well to a building is determined by oil and gas companies — is simply false. There are myriad elements that play into the well location calculation, including property lines; mineral property boundaries; surface and lease agreements; development plans; encroachment of new development; lease lines; drilling spacing orders; access; centralization of facilities; technical limitations; and the actual location of the resource.

While a 500-foot setback can have unintended and unnecessary consequences, a 1,000-foot setback would only exacerbate them.

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Private property rights. Any surface owner must have the ability to work with the operator to determine well location without adjacent landowners having veto power. Mineral rights owners are also Coloradans with an interest in reasonable access to their private property. But with increased setbacks, royalty owners can expect that some of their private property mineral interests will be reduced due to decreased access. Also, some of the more extreme advocates for these larger setbacks want to ensure that adjacent landowners first approve what you, as a private property owner, do on your own land.

Agricultural and surface owner rights. Mandatory increased setbacks can have numerous unintended consequences for surface owners. It significantly reduces options for irrigation placement and can result in wells placed in the middle of arable land and pastures, reducing the amount of producible fiber and food, lowering land value. The 350-foot setbacks impact 8.8 acres; 1,000-foot setbacks affect 72 acres. Mandatory setbacks can require inefficient placement of agricultural infrastructure, including access roads, sheds and other buildings. These consequences can lower a farmer's incomes, hurting the surface owner's economic viability. Surface owners deserve negotiating power in deciding the mutually best location.

Unintended environmental consequences. Increased setbacks require longer drilling laterals and drilling time. This can increase the resources required for drilling, including pipe, cement and water. It can also increase drilling time on-site, the number of truck trips, and the footprint required for drilling, which can result in suburban sprawl by increasing the footprint of future development. Finally, increased setbacks discourage the centralization of buildings and facilities, reducing open space and suitable habitats.

The current state process allows for collaboration between all interested stakeholders on the location of the well without trampling on private property rights or creating unintended consequences. The state's robust regulations adequately protect public health, safety and welfare. Any new rule should provide flexibility for all interested parties to determine the best location of a well while respecting private property rights.

Regulators and legislators must recognize that well-siting is a complex process involving many stakeholders. Sound-bite solutions get you quoted, but they do not fix the problem.

Amy J. Williams is with Citizens Sup- porting Property Rights, land and min- eral owners in Routt County. Terry Fankhauser is executive vice president of the Colorado Cattle- men's Association.

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